Periods of economic downturn can severely affect the performance of firms in general, and retailers in particular. However, all retailers are not equally affected by recessionary periods, with some viewing this time as an opportunity to invest and establish competitive advantage and others cutting back and waiting for the recession to pass. In the light of the current economic downturn, the purpose of this paper is to investigate retailers' strategic response to the downturn, and assess how these responses differ across different organisations in terms of size, geographic location, and sector of operation.
A total of 50 (25 Australian, 25 New Zealand) managers associated with the retail sector (ranging from chief executive officers to store owners) were invited to participate in face‐to‐face interviews, resulting in 28 in‐depth interviews (15 Australian, 13 New Zealand) across a wide range of retail categories. These exploratory data were combined with a review of the literature to explore retailer responses to the current economic downturn.
This paper suggests that there are growth opportunities for retailers during times of economic downturn. Specifically, this paper suggests that large retailers see this as an opportunity to invest in green and sustainable business practices as a means to aid in the recovery of the recession in terms of reducing costs and beyond in terms of developing competitive advantage. Other strategies include: personalised offerings, differentiation via service, realignment of offer to changing consumer value(s), and reduced costs and investment.
The focus of this paper is medium to large sized organisations and, as such, its generalisability to small retailers may be somewhat limited.
Past research reveals that not all the retailers are equally affected by recessionary periods. Given this, the value of this paper lies in providing insight into strategic response to an economic downturn, and providing a foundation for examining these strategies and their link to retail performance via quantitative research.
